UK General Election 2015

[Rollo]

So that's it. They're in power on their own; a bit of a surprise maybe. Well if they really want to encourage more people to work, they might do well to consider that abolishing of income tax for minimum wage folks.

Average hours in the UK is 43.6

This works out to be:
£6.50 * 40 = £283.40
£260.00 * 52 = £14,736

£14,736 - £10,600 = £4136
Assessed at 20% = £827.20

That works out to be an effective rate of taxation of just 5.61%
Last year, my effective rate of taxation was 18.383%
Admittedly, I don't live in the UK but, 5.61% seems like a fairly reasonable sort of rate to pay for the trappings of civilisation like roads, schools, hospitals, the defence forces, the judiciary and what not.

Also, abolishing of income tax for minimum wage folks isn't going to encourage more people to work. Income tax is an end cost; not an initial input driver in the equilibrium position of wages.

The best solution would be to set a rate on passive income (such as dividends, rents and bonuses) at something like 50%, which would change the nature of capital flows. Then have government directly employ more people, which would have effects on labour markets.